The California LLC – Taxed to Death?

California is renowned for being about as business unfriendly as any state. If you aren’t getting taxed over here, you are getting hit with some odd fee over there. The weather makes up for it, but sometimes you really have to wonder about whether it is all worth it. This is particularly true for small businesses who form limited liability companies only to get hit upside the head with a host of surprises.

The first surprise is one you could only find in California. The LLC is charged an $800 annual fee for the “privilege of doing business in California”. Oh, joy. The fee is due not at the end of your first year, but within a few months of forming your business. Yes, the door is barely open and you are already getting hit with state expenses!

The next surprise comes when you start bringing in some business. The wicked surprise goes by the name “gross revenue tax.” In addition to your $800 annual fee discussed above, you have to pay a tax based on your gross revenues. The tax doesn’t start until you are bringing in at least $250,000 a year, but it is important to remember what we are talking about here. This is a “gross” revenue tax. An example will help explain the significance of this.

Imagine I have a store selling some high priced item. My business plan calls for me to lose money my first three years as business builds up. The first year I bring in $125,000 and lose $10,000 as expected. Then year two rolls around. I bring in $260,000 in receipts and lose another $10,000. Much to my surprise, I own an additional $900 in gross revenue tax. Yes, this is true even though I didn’t make a profit!

So, should you avoid forming a California LLC? No, not really. It is still a great choice. A corporation in California has to pay the same $800 fee, but not the gross revenue tax. As long as you know what you are getting into, the LLC is still worth the financial aggravation.

California Refinance – Refinancing In California

Refinancing your home basically replaces your existing mortgage with a new loan. You can choose either a variable or fixed interest rate and the length of your new loan can be up to 30 years. Varying terms and fast approvals make refinancing your California home a smart decision. Refinancing can give you extra money each month due to the potential decrease in your monthly mortgage payments. If you are paying a high rate of interest on your mortgage, then now is the best time to refinance your home in California.

California is a great place to own a home. The business community is thriving and the sun swept landscape is breathtaking. Mortgage lenders can generally provide home loans in all states, so choosing a lender that will refinance your California home is easy. Online lenders can give you quotes from multiple mortgage companies with one simple application. By completing a short application, you could be contacted by lenders who are anxious to approve your California refinance loan in just hours. Many lenders are offering zero point loans and low cost refinancing. Even with bad credit, you can refinance your California home. Compare your current interest rate with the low rates being offered by lenders and see if you could save money by refinancing. Some lenders will even finance the points you pay on your loan to reduce the amount of cash you need upfront. If you want to refinance your home and lower your payments, contact a lender who can approve your loan in California or in any other state you may own a home. Refinancing is a great way to take advantage of the great loans being offered by online lenders and traditional mortgage companies. You can get free quotes from several lenders and compare the rates offered by each. You can lower your monthly payments and have extra cash each and every month.